The field of potential rival bidders for Walt Disney narrowed yesterday, but investors continued to bet that Comcast's unsolicited bid for the US media and entertainment group would need to be raised.
Cox Communications, one of Comcast's peers in the US cable industry and a possible candidate to match its surprise offer, said it was unlikely to seek a marriage of content and distribution.
"We think our expertise has been in the distribution business. We have been consistent in that. I don't think our mind changes one iota from yesterday's deal announcement," said Mr Jim Robbins, Cox's chief executive.
Comcast's stock offer on Wednesday morning triggered speculation that Disney would search for a white knight.
A wide range of potential bidders has been named, from Viacom to Time Warner, General Electric to News Corporation, Interactive Corp, Liberty Media and even Microsoft. But size - or regulatory concerns - could dissuade any of these from mounting a rival offer, observers said.
Investors believe that even if a rival bidder does not emerge, Comcast would have to increase its offer to win Disney.
The offer of 0.78 Comcast voting shares for each Disney share valued the Magic Kingdom at $66 billion (€51.5 billion), including debt, but that figure dropped to $61.8 billion by the end of trading on Wednesday as Comcast's share price fell.
That trend continued yesterday with Comcast shares down by a further 2.4 per cent to $30.47 in lunchtime trading in New York, whilst Disney shares were up another 2.3 per cent to $28.20. That left Disney's share price almost 19 per cent above the value of the offer.
So far, the Disney board has not issued a formal response to Comcast's offer beyond a short statement saying it would be "carefully evaluated".
But it is expected to meet soon to issue a formal response, a person close to Disney said. "If the board takes the position that this deal does not deliver incremental value and they could do better on their own, they could reject it outright."
However, even before Walt Disney formally hired Goldman Sachs and Bear Stearns to defend it against Comcast's bid, the Magic Kingdom had laid out its first, predictable response: insist on the positive numbers.
Shortly after Comcast unveiled its offer on Wednesday morning, Disney published its vastly improved fiscal first-quarter figures. Net income rose to $688 million, compared with only $36 million last time.
